Romney attacked on Bain exit date

Obama campaign says he lied about when he left firm

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Mitt Romney’s campaign asked for a correction on Thursday’s Globe story, but did not dispute any facts in the article

By Callum Borchers
Globe Correspondent
July 13, 2012

President Obama’s reelection campaign Thursday accused Mitt Romney of lying — and perhaps of breaking federal law — after the Globe reported that government documents listed him as in charge of the private equity firm he founded, Bain Capital, three years longer than he has previously stated.

The Romney campaign called such statements by the Obama team reckless and asked the Globe to print a correction, which it has declined to do.

“When Mitt Romney ran for governor and now as he’s running for president, he consistently claimed he could not be blamed for bankruptcies and layoffs from Bain investments after February 1999 because he departed for the Olympics,” Stephanie Cutter, Obama’s deputy campaign manager, said in a statement. “Now, we know that he wasn’t telling the truth.”

In a conference call with reporters, Cutter alleged that Romney, the presumptive GOP nominee for president, was either “misrepresenting his own position at Bain to the SEC, which is a felony, or he was misrepresenting his position at Bain to the American people.”

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“President Obama’s campaign hit a new low today when one of its senior advisers made a reckless and unsubstantiated charge to reporters about Mitt Romney that was so over-the-top that it calls into question the integrity of their entire campaign,” Rhoades said. “President Obama ought to apologize for the out-of-control behavior of his staff, which demeans the office he holds.”

New evidence emerged late Thursday that raises further questions about Romney’s claim of a total disconnect between himself and Bain Capital entities after Feb. 11, 1999, when he became chief executive of the Salt Lake Organizing Committee.

In 2002, facing a ballot challenge from Democrats — who contended he had moved his residence to Utah — Romney testified before the state Ballot Law Commission as a gubernatorial candidate that “there were a number of social trips and business trips that brought [him] back to Massachusetts, board meetings” while he was running the Olympics.

Romney said he remained on the boards of several companies, including the Lifelike Co., in which Bain Capital held a stake until 2001. The Huffington Post and MSNBC also carried reports Thursday night about Romney’s membership on the Lifelike board.

The Romney campaign claimed the candidate’s testimony to the ballot commission actually strengthens the case that he left Bain Capital for good in 1999.

“After extensive hearings, the Ballot Law Commission came to the same conclusion as numerous independent fact checkers in finding that Mitt Romney ended his active employment with Bain Capital in 1999,” Romney spokeswoman Amanda Henneberg said. “Every public judgment, including a unanimous one from the Ballot Law Commission, has confirmed this fact.”

The Globe’s initial report Thursday focused on apparent inconsistencies between Securities and Exchange Commission filings by Bain Capital — which state that Romney continued to head the firm after Feb. 11, 1999, the date he claims to have retired — and Romney’s most recent submission to the Office of Government Ethics, which says that “since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way.” Other media have reported similar findings.

Two other documents contain similar information, the Globe found. In his first year as governor of Massachusetts, in 2003, Romney disclosed to the State Ethics Commission that he still owned 100 percent of Bain Capital in 2002. Romney’s state financial disclosure forms indicate he earned at least $100,000 as a Bain “executive” in 2001 and 2002, separate from investment earnings.

Spokespersons for both the SEC and the Office of Government Ethics declined to comment on the record Thursday.

The Romney campaign did not dispute any facts reported Thursday by the Globe but nevertheless requested a correction, saying the story left the false impression that Romney continued to oversee Bain Capital’s day-to-day operations.

Globe editor Martin Baron responded: “Having carefully reviewed that request, we see no basis for publishing a correction. The Globe story was entirely accurate.”

Baron noted that “the Globe story was based on government documents filed by Bain Capital itself” and said the article “also gave a full account of the Romney campaign’s position that, notwithstanding several years of regulatory filings, Mitt Romney ‘retired from Bain Capital in 1999 … [and] has had no involvement in the management or investment activities of Bain Capital, or with any of its portfolio companies, since that time.’ ”

Bain Capital supported the Romney campaign’s position in a statement Thursday: “Due to the sudden nature of Mr. Romney’s departure, he remained the sole stockholder for a time while formal ownership was being documented and transferred to the group of partners who took over management of the firm in 1999. Accordingly, Mr. Romney was reported in various capacities on SEC filings during this period.”

The firm did not respond to Globe questions about why SEC filings show Romney in control of five Bain Capital business partnerships that were formed in January 2002 — long after Romney claims to have left.

Romney and his presidential campaign have gone to great lengths to assert that he permanently departed Bain in 1999, never exerted any influence on its operation, and should not be held responsible for bankruptcies and layoffs after that time.

But at the time of his departure, Romney’s frame of mind was merely to take a leave of absence while he was running the winter Olympics, according to Romney’s own testimony to the state ballot commission, which let Romney remain on the ballot for governor in 2002.

“When I left my employer in Massachusetts in February of 1999 to accept the Olympic assignment,” he testified, “I left on the basis of a leave of absence, indicating that I, by virtue of that title, would return at the end of the Olympics to my employment at Bain Capital, but subsequently decided not to do so and entered into a departure agreement with my former partners.”

Bain Capital told the Globe Wednesday that “Mitt Romney retired from Bain Capital in February 1999.”

Experts in finance and security law disagree about how much legal significance the discrepancies between Romney’s financial disclosure statements and SEC documents may have.

One securities specialist said that Bain — a privately held company that is not traded on the stock market — should not be held to the same standard of accuracy as a publicly traded corporation. Adam C. Pritchard, a professor of securities law at the University of Michigan, described filings disclosing Bain dealings investments as “ministerial.”

“The only way someone would be misled is if they were an investor in” Bain, he said. It would be a different matter in a publicly traded firm, he added: “If Apple were listing Steve Jobs as CEO, that would be a problem, him being dead and all.”

Others, including Roberta S. Karmel, a former SEC commissioner quoted by the Globe on Thursday, say SEC filings are a crucial window on the operations of business.

“Let me put it this way,” Karmel said: “It’s a pretty serious problem to file false documents with the SEC. You can be prosecuted for that.”

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